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Copano Energy LLC Message Board

  • moneyonomics moneyonomics Jan 5, 2012 8:21 PM Flag

    TPG preferred conversion distribution rate-$2.905

    specific language which sets "$2.905 base" at end of 2013 from 10k below

    "...Beginning with the distribution for the quarter ending September 30, 2013, and through the distribution for the quarter ending June 30, 2016, we are entitled to elect whether to pay preferred distributions in cash, in kind or in a combination of both....Cash distributions on the Series A preferred units will equal the greater of $0.72625 per preferred unit per quarter or the quarterly per-unit distribution paid to our common unitholders for the applicable quarter."




    From 2010 10k-page f-29

    Series A Convertible Preferred Units

    On July 21, 2010, we issued 10,327,022 Series A convertible preferred units (“Series A preferred units”) in a private placement to TPG Copenhagen, L.P. (“TPG”), an affiliate of TPG Capital, L.P. for gross proceeds of $300 million. Credit Facility...."

    "...Distributions. The Series A preferred units are senior to our common units with respect to rights to distributions. For the first three years after the date on which they were issued, the Series A preferred units are entitled to quarterly distributions in kind (paid in the form of additional Series A preferred units). In-kind distributions will equal $0.72625 per preferred unit per quarter (or 10% per year of the purchase price of a Series A preferred unit) divided by the $29.05 issue price. Beginning with the distribution for the quarter ending September 30, 2013, and through the distribution for the quarter ending June 30, 2016, we are entitled to elect whether to pay preferred distributions in cash, in kind or in a combination of both. For quarters ending after June 30, 2016, we will be obligated to pay preferred distributions in cash unless our available cash (after reserves established by our Board of Directors) is not sufficient to fund the distribution or we and the preferred unitholder agree that a distribution will be paid in kind. Cash distributions on the Series A preferred units will equal the greater of $0.72625 per preferred unit per quarter or the quarterly per-unit distribution paid to our common unitholders for the applicable quarter. In kind distributions for the year ended December 31, 2010 totaled $15,188,000.


    Conversion. At the special meeting referred to above, our common unitholders also approved full convertibility of all Series A preferred units into common units on a one-for-one basis. Beginning on July 21, 2013, the Series A preferred units will generally become convertible into common units by us or by the preferred unitholder, subject to the conditions described below. After July 21, 2013, the preferred unitholder may elect to convert all or any portion of its Series A preferred units into common units at any time, but only to the extent that conversion will not cause our estimated ratio of total distributable cash flow to per-unit distributions (for all of our outstanding common and Series A preferred units) to fall below 100% over any of the forecasted succeeding four quarters. In addition, we will have the right to force conversion of all or any portion of the Series A preferred units if the daily volume-weighted average trading price and the average daily trading volume of our common units exceed $37.77 and 500,000 units, respectively, for 20 trading days out of the trailing 30-day period prior to our notice of conversion. On the date of conversion, the rights of the converting Series A preferred units will cease; the converting Series A preferred units will no longer be outstanding and will represent only the right to receive common units at the rate of one common unit for each preferred unit.

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    • as you know mwe originally had a gp that was mergerd, but no preferreds now. re read my earlier post below to you on linn and how linn captured inctive typ right in ipo


      "yes rlp, the structure for preferreds or any mezzanine type financings always works in favor of lender. In essence a gp as we have discussed on other boards is a lender or mezzanine financer in addition to being original owner of the assets in most cases. I do not like to get into this on linn board as emotions are so high,; but effectively linn as an example used mezzaine type financings early on as have others. When Linn originally issued their units in 2005 there was an effective dillution to the common unit holders where they received 42% of the units and paid over 125% of the original investment, which effectively gave the original investor, Quantum Energy partners which Michael Linn was a ceo of, a negative $52 mm to orginally invest or received an incentive up front for the properties contributed. Also along the way Linn issued special class common units that received 115% of the normal common unit holders distributions; so yes rlp all mlp's have or have used effective gp type fianancings they just do not call it that"

    • I do in CPNO's case. Does MWE or LINE have any similar preferreds?

    • Voting

      The Series A Preferred Units have voting rights identical to the voting rights of the Common Units and will vote with the Common Units as a single class, such that each Series A Preferred Unit (including each Series A Preferred Unit issued as an in-kind distribution) is entitled to one vote for each Common Unit into which such Series A Preferred Unit is convertible on each matter with respect to which each Common Unit is entitled to vote, subject to the limitations described above.

      The foregoing description of the Series A Preferred Units does not purport to be complete and is qualified in its entirety by reference to Amendment No. 1 (“Amendment No. 1”) to the Fourth Amended and Restated Limited Liability Company Agreement of Copano (the “Copano LLC Agreement”), a copy of which is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference.

      Class B Units

      The Class B Units are a new class of non-voting equity security in the Company. The Purchaser will be entitled to a quarterly distribution per Class B Unit equal to 110% of the quarterly cash distribution amount paid per Common Unit. The Class B Units will rank junior to the Series A Preferred Units and pari passu with the Common

      Units of the Company with respect to distribution rights, and junior to the Series A Preferred Units and senior to the Common Units of the Company with respect to rights upon liquidation.

      The Class B Units are non-voting, except that the Class B Units are entitled to vote as a separate class on any matter that adversely affects the rights or preferences of the Class B Units in relation to other classes of interests in the Company or as required by law. The approval of a majority of the Class B Units will be required to approve any matter for which the holders of the Class B Units are entitled to vote.

      If the Series A Proposal is approved by the Company’s unitholders, then any outstanding Class B Units will convert automatically into Common Units.

      The foregoing description of the Class B Units does not purport to be complete and is qualified in its entirety by reference to Amendment No. 1 to the Copano LLC Agreement, a copy of which is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference."



      http://www.sec.gov/Archives/edgar/data/1297067/000130796610000012/form8-k.htm

    • This almost sounds like a GP....

      • 1 Reply to rlp2451
      • yes rlp, the structure for preferreds or any mezzanine type financings always works in favor of lender. In essence a gp as we have discussed on other boards is a lender or mezzanine financer in addition to being original owner of the assets in most cases. I do not like to get into this on linn board as emotions are so high,; but effectively linn as an example used mezzaine type financings early on as have others. When Linn originally issued their units in 2005 there was an effective dillution to the common unit holders where they received 42% of the units and paid over 125% of the original investment, which effectively gave the original investor, Quantum Energy partners which Michael Linn was a ceo of, a negative $52 mm to orginally invest or received an incentive up front for the properties contributed. Also along the way Linn issued special class common units that received 115% of the normal common unit holders distributions; so yes rlp all mlp's have or have used effective gp type fianancings they just do not call it that

    • Money,

      In your post from the 10k, those statements say nothing about the common paying .72625/share per qtr. That is for the preferred only. .... we are entitled to elect whether to pay <<<< preferred distributions >>>> in cash, in kind or in a combination of both

 

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